*Internal Controls and Credit Risk in European Banking: The Basel Committee on Banking… DOI: http://dx.doi.org/10.5772/intechopen.92889*

chapter to the agency theory is how board chair being ex-CEO increases bank risks. Prior research [10–12] uses CEO duality which is defined as situations where existing CEOs double as board chair. Our study uses current chair being ex-CEO to determine the effect of previous position (ex-CEO) in influencing board functions. We find that board chair being ex-CEO increases bank credit risk which is contrary to the views of John et al. [12] that CEO duality increases corporate governance. One other strength of this chapter is its complementarity to existing and widely used quantitative approaches to managing credit risk. The chapter encourages the use of internal governance mechanisms to address a major problem in banking. The rest of the sections cover hypotheses development, methodology, results and discussion, and conclusion.
